Indian manufacturing is slowly coming out of the pandemic depression. As the situation eases, all sub-sectors are preparing for a faster recovery. We have selected three stocks with good potential in the short to medium term. Among these three stocks, one is a mid-cap stock and the other two are small-cap stocks. 1. ELGI Equipments Ltd (NS: ELGE) ELGI equipment is a manufacturer of air compressors and car service station equipment. The company operates on a global scale and has been in this business for the past 60 years. Its products are used in various industries such as food processing, pharmaceuticals, and agriculture. ELGI has a diversified product portfolio with operations in more than 120 countries. It is expanding in new areas of Europe. The company strategically targets several countries because these countries have high profit margins compared to India. The company reports a strong financial position for the first quarter of fiscal year 2022. Its net sales were 489.44 crore, an increase of 71.06% from the 286.13 crore in the first quarter of fiscal year 2021. Net profit increased by 237.65%, from 8.73 crore to 12.02 crore. In the past five years, its revenue has grown at a compound annual growth rate of 6.67%, compared to the industry average of 2.27%. The compound annual growth rate of net profit was 15.01%, while the compound annual growth rate of the industry during the same period was 4.65%. FII slightly increased its holdings in the June 2021 quarter. The stock is up 143% in one year and 21.6% in six months. It is currently trading at a discount of 15.1% from its 52-week high of 243.02 rupees. Action Construction Equipment Ltd (NS: ACEL) Action Construction Equipment is a leading manufacturer of construction and material handling equipment. It has the largest market share in India’s mobile cranes and tower cranes. The company operates in the agriculture, construction, road construction and earthmoving equipment industries. The current Covid-19 scenario promotes warehousing activities throughout India. It has created an excellent demand for loader equipment and machinery. ACE’s goal is to capture 50% of the market share in the next few years. The government’s promotion in the field of infrastructure will have a positive impact on the demand for mobile cranes and construction equipment. The company reported that net sales in the first quarter of fiscal year 2022 were Rs 3,215 crore, an increase of 218.42% from Rs 1,097 crore in the previous quarter. fiscal. Net profit during the same period increased from Rs 4.29 crore to Rs 19.31 crore, an increase of 550.19%. Its five-year compound annual growth rate of net income reached an astonishing 51.81%, while the industry average was 29.74%. The compound annual growth rate of revenue during the same period was 13.94%.3. Timken India Ltd (NS: TIMK) Timken India is a subsidiary of Timken Corporation of the United States. The company manufactures tapered roller bearing components and accessories for the automotive and railway industries. It also provides services for other fields such as aerospace, construction and mining. The railway is undergoing a modernization stage. Traditional passenger cars are converted to LHB passenger cars. Metro projects in many cities will become a catalyst for the company’s growth. The growing demand from the CV department will have a positive impact on the company’s sales. In the fourth quarter of fiscal 2021, Timken reported total independent revenue of Rs 483.22 crore, an increase of 25.4% from the total revenue of Rs 385.85 crore in the previous quarter. Its three-year net profit compound annual growth rate for the 2021 fiscal year is 15.9%. The stock is currently trading at NSE at Rs 1,485.95. Although the stock was trading at a 10.4% discount to its 52-week high of Rs 1,667, it achieved a return of 45.6% in one year and an 8.5% return in six months.
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